As chatter heats up about the US hitting the debt limit and defaulting, it's worth remembering that there are proposals like this on the table.

It's the "Full Faith And Credit Act" sponsored by CA Congressman Tom McClintock (R), and the text is incredibly straightforward:

SECTION 1. SHORT TITLE.

This Act may be cited as the `Full Faith and Credit Act'.

SEC. 2. PRIORITIZE OBLIGATIONS ON THE DEBT HELD BY THE PUBLIC.

In the event that the debt of the United States Government, as defined in section 3101 of title 31, United States Code, reaches the statutory limit, the authority of the Department of the Treasury provided in section 3123 of title 31, United States Code, to pay with legal tender the principal and interest on debt held by the public shall take priority over all other obligations incurred by the Government of the United States.

Basically, no matter what happens, the US Treasury will use revenue from taxation to pay debts before anything else.

And this needn't be a problem. As we pointed out yesterday, the government takes in way more each month than it pays out in coupon payments.